April 15 is our annual “anti-holiday”—the date we love to hate. Many Americans dread that day each year because of the misconception that individual tax returns must be filed by then. Actually, only a rough estimate of what you owe is due on April 15. The real filing deadline is Oct. 15. So, instead of adding unnecessary stress by hastily gathering your information and rushing to file by the April 15 “deadline,” consider filing an extension. An extension to file is automatically granted — no justification is needed — provided you file Form 4868 on or before April 15.
Since you have some more time now to work on your taxes, here are a few “fun facts” showing that tax law often changes and that tax regulations are sometimes even less straightforward than they seem:
•12 million people file an extension each year.
•The Revenue Act of 1861 included a tax on personal incomes. The income tax provision was repealed in 1862
•In 1894, Congress enacted a flat-rate federal income tax, which was found to be unconstitutional in 1895.
• The 16th Amendment gave Congress the power to levy and collect taxes on all sources of income.
• Wyoming was the 26th and last state needed to ratify the 16th Amendment.
• The Revenue Act of 1913 re-imposed the federal income tax and established March 1 as the date that tax payments were due. In 1918, Congress pushed the date forward to March 15
• The Bureau of Alcohol, Tobacco, and Firearms (i.e., ATF) was originally part of the IRS.
• The Current Tax Payment Act of 1943 required employers to withhold taxes from employee’s wages.
• The tax overhaul of 1954 moved the due date for tax payments to the current April 15.
• Former Supreme Court Chief Justice Oliver Wendell Holmes said, “Taxes are what we pay for a civilized society.”
• If a refund is due to you, you will not be penalized for not filing.
• The IRS will deny a refund if you file a return three or more years late.
• You can deduct moving expenses for you and your pet if you are changing jobs and meet several tests.
• A clarinet and lessons can be considered tax deductible if an orthodontist has recommended playing the instrument as a method of correcting an overbite.
• Bingo-playing taxpayers can deduct the amount lost in a given year, up to the amount that was won. This deduction requires a detailed diary of winnings and losses.
•Food for guard dogs or other animals that protect your business property are a deductible business expense.
• Expenses for fostering a pet are deductible, provided the expenses are directly related and solely attributable
to the rendition of services to a qualified 501(c)(3) organization and you have proper documentation and written acknowledgement for expenses over $250. The virtual currency bitcoin is a tradable good. Thus, the estimated market value
of income received in bitcoins must be included in your taxable income.
• The United States Tax Court has ruled on some interesting and creative attempts at claiming deductions:
– Approved business expense: Free beer offered by a gas station owner as a promotional scheme.
– Approved medical expense: Travel, room, and board for sending a young child with respiratory problems to a boarding school in Arizona.
– Denied theft-loss deduction: The theft of photographs, souvenirs, and other “memories” that a taxpayer claimed had been illegally removed and thrown away by their landlord.
– Denied casualty loss: China and glassware broken by the family pet.
– Denied medical expense: Dancing lessons used to ease arthritis, improve a nervous condition, and improve varicose vein problems.
– Denied business expense: Dentures, even though the false teeth enabled an actor to articulate without a hiss.
– Denied medical expense: The cost of bath oils to improve dry skin